The rising concerns around privacy and the increasing number of regulations have pushed the biggest tech companies to review the information that they collect about consumers and how it is processed. In April 2021, Apple made a significant move and gave their users the ability to decide which apps can collect information about them. This shift toward more privacy control implies that media platforms will have less data to work with, affecting their targeting capabilities and the efficiency of their advertising solutions.
The bottom of the funnel is now blurry
Take the case of Facebook, which had built such a robust advertising platform with precise targeting capabilities. Producing a piece of content and pushing it towards a specific audience could allow for the low cost of acquisition. It’s basic math: if you are competing to show an ad to a different group of people distinct to an extent from the groups other companies are targeting, you will pay less due to lower competition. If in addition to that, your ad speaks to them, click-through rates and conversion rates are better. As less data becomes available to Facebook, the effectiveness of their targeting can only be negatively impacted. The extent of the impact varies depending on the industry or target region, but overall, companies that rely on Facebook to drive customer acquisition will see increasing CPMs and lower conversion rates as relevancy declines. Though you can find ways to mitigate CPC rises on Facebook with a good understanding of the platform as explains Akash Tripathi in his article 5 Ways To Lower Your Facebook Ads CPC, it will be impossible not to pivot.
Pivoting conversion goals, moving to the middle of the funnel
Trying to get an immediate transactional action from someone will naturally get more expensive. We also have to take into consideration that the platform reporting such conversions to Facebook, will be increasingly inaccurate and misleading. Essentially, the way we think about digital paid media will need to shift. We have to allow for more time before we measure the efficiency of ads, change the reporting platforms we are looking at, and aim for less direct response.
Companies will have to move to less intense conversion goals, such as email or SMS subscriptions for E-commerce stores. Etgar Shpivak goes over new conversion actions businesses should go after if they want to Optimize Facebook Creatives for iOS 14. In parallel, companies should invest in more content production, whether it be blogs or videos on YouTube and TikTok. This will provide more information to the consumer and will be key to building a strong brand presence that allows for more sales in the long run. As Gary Vee, a trailblazer in the social media marketing world has said, “when you market, you do a lot of things that do not have black and white ROI within 30 seconds, that’s how you build something meaningful”. Now is the time to test and investigate new channels. If you are looking for some ideas, Liam Johnson shows in this article Three Social Media Platforms To Invest In (Other Than Facebook).
So… Do you have a brand?
Having a company is one thing. Having a brand is something else. A brand is present and recognizable. A brand is a topic of discussion in the public space. A brand is recommended to one person by another. A brand is heard of before the consumer even starts researching. As the ability to get the immediate sale or action decreases, consumers’ buying decisions will rely even more on Brand. If you have not started building one or continuing to do so in the online space, updates on privacy policies will create significant challenges for your company.